TinyTim

Battery Investing for Beginners

Don-
The aircraft carrier going over the beach house was great. Can't wait for 2012.

If green is great, then short the browns:

seekingalpha.com/artic...

Check out the comments following the article.
These are not Prius drivers.

Battery Investing for Beginners

Jerrydd-
Thanks for the link to the useful SA article.
Very factual.
Here's more on batteries and lithium from the same analyst:
www.byroncapitalmarket...

How PHEVs and EVs Will Sabotage America's Drive for Energy Independence

"in terms of national fuel savings per kWh of battery capacity..."

OK, John-
We can juggle the numbers in this mythological dreamworld.
Since you want to add in overhead and profit on the batteries, certainly the same applies to the other extra HEV components. We can even go out to 2020.

In 2020, when gas is $7/gall and batteries are $800/kWh, I see a 25kWh BEV containing a $20000 battery back against a HEV getting 50mpg.

Fuel cost-
12,000 mpy at 50mpg at $7.00/gal = $1680
12,000 mpy at 100miles / 25kWh at $.08 /kWh (off peak) = $240

Vehicle drive train cost variant-
BEV- Leaf- 25kWh batteries- $20000
HEV-Prius- ICE with fuel system (gas tank, emissions equipment), exhaust system (including cat converter, muffler), cooling system (radiator, fan), transmission (variable ratio), incremental cost of control and drive system for two power sources (motor and ICE)(generator and extra drive motor, electronics, software) - plus profit and overhead - $20,000

Bottom line - In 2020, the BEV be much cheaper to operate and provide energy independence. It will also be comparably priced.

BTW have you considered the ethical and environmental implications of all those extra motors, generators and other resources being used in the HEV's compared to the BEV's. Think of the reduction in quality of life if some elderly person can't get a PowerChair because her electric motor just went by in a Prius.

How PHEVs and EVs Will Sabotage America's Drive for Energy Independence

" in terms of national fuel savings per kWh of battery capacity..."

In 2015, when gas is $4/gall and batteries are $200/kWh, I see a 25kWh BEV containing a $5000 battery back against a HEV getting 50mpg.

Fuel cost-
12,000 mpy at 50mpg at $4.00/gal = $960
12,000 mpy at 100miles / 25kWh at $.06 /kWh (off peak) = $180

Vehicle drive train cost variant-
BEV- Leaf- 25kWh batteries- $5000
HEV-Prius- ICE with fuel system (gas tank, emissions equipment), exhaust system (including cat converter, muffler), cooling system (radiator, fan), transmission (variable ratio), incremental cost of control and drive system for two power sources (motor and ICE)(generator and extra drive motor, electronics, software) - $10,000

Bottom line - In 2015, not only will a BEV be cheaper to operate and provide energy independence, it will cost less to buy. The competition isn't HEV, it's high economy ICE vehicles, and the main factor is the price of fuel.

To the extent that people buy HEV's now, they are slowing the ultimate conversion to EV and sabotaging America's drive for energy independence.


On Aug 27 12:34 AM John Petersen wrote:

> TinyTim, the variant on the numbers you presented would be as follows:
>
>
> save 200 GPY in a Prius - 1.5 kWh
> save another 100 GPY in a Volt - add 14.5 kWh
> save another 100 GPY in a Leaf - add 8 kWh
>
> At a current cost of $1,000 per kWh and a 2012 target of $500 per
> kWh, that description works for me.
>
> The real question is which use of batteries do you think the Federal
> government should subsidize?

How PHEVs and EVs Will Sabotage America's Drive for Energy Independence

John-
Next time you get an epiphany, please summarize. This bickering is giving me such a headache, I may just start reading iamned.com

Your very concise summary comment:
" in terms of national fuel savings per kWh of battery capacity, PHEVs and EVs are far less attractive than HEVs which only need 1.5 kWh of battery capacity to slash gasoline consumption by 40%."

This is slick reasoning and I give you due credit.
Your jury seems to agree and applaud.

Looking out in the future a little, after consumers have had a chance to vote with their dollars and battery investors get to do the same, I see the cost of surviving similar capability passenger vehicles converging. The cost is the vehicle price plus the fuel / operating cost. It won't matter much whether they're gas, HEV, PHEV or BEV. It's basic equilibrium economics.

At that point, gasoline consumption using the 12,000 miles per year driving:
Gas at 30mpg = 400 gallons
HEV at 60mpg = 200 gall
PHEV at 120mpg = 100 gall
BEV at (no gas) = 0 gall

It seems like common sense that the more electric traction we use, the less transportation oil we will need and the more energy independence we will enjoy. I don't think there's any doubt we will get there. Especially since "In America we wake up in the morning, we go to work and we solve our problems."

So the only real issue at hand is the path we take to get there. Capitalism tends to be messy, but efficient.
I have no doubt that the technology we eventually end up with will be the lowest cost one.

Why Lead-Carbon Batteries Will Deflate the Li-ion Bubble

"It’s largely the cost issue that Khosla says makes hybrid vehicles “greenwash.” He drives a hybrid, and considers the Toyota Prius “interesting,” but says it offers a very expensive, and thus limited solution for reducing greenhouse gas emissions"


Sound familiar, John?
Hybrids are overhyped.

Axion’s Lead Carbon Batteries: Sweet Spot for Micro-Hybrid Vehicles?

"Resorting to personal insults to discredit facts that you don't like and want to ignore is intellectually dishonest"

WTF?

How Growing HEV Markets Will Impact Battery Manufacturing Revenues

Don's comment re the lack of glamor in lead may or may not apply to consumers, but I think it will be a strong sell for the folks dishing out the money:

www.edn.com/blog/14700...

Note the comment about larger format Li automotive batteries. It's amazing that Tesla uses 5000+ AA batteries because that's the std form.

How Growing HEV Markets Will Impact Battery Manufacturing Revenues

Don-

The Chinese are going Keynesian.
They're looking for an alternate to the USD as defacto reserve currency. Check out "bancor" or "unitas" on Wikipedia. These were proposals for reserve currencies based on commodity metals (including gold) at Bretton Woods. Turns out they dropped everything but gold, then Nixon dropped gold.
The Chinese have also been agitating for IMF SDR's for the same reason.
The reason of course is they hold too many USD ($1.9T)
"Beijing suspects that the US Federal Reserve is engineering a covert default on America's debt by printing money". LOL

It all comes down to the Triffen Dilemma. The inherent conflict of interest between domestic monetary policy and international monetary policy for any reserve currency.

Since China strongly promoted the trade imbalance that created their reserves, it's hard to feel sorry. When you owe the bank a million, you have a big problem. When you owe the bank a trillion, it's them with the big problem.

If China wants to play with metals, they can more easily trade the markets. I sure hope they're not trying to corner a metal like copper. Brings back memories of the Hunt Bros and Rich Dennis with silver.

How Growing HEV Markets Will Impact Battery Manufacturing Revenues

John-
another interesting article.
Living in the Sunbelt, but originally from the Rustbelt, I can't help wondering about the affect of cold temps on HEV power train batteries. I'm fairly confident current HEV's have to make allowances for batteries to warm up. I've had my share of experiences with frozen starter batteries.

I notice you have refined your definitions of the basic HEV types.

I reviewed the F&S report after your last article and would be reluctant to hang my hat on their research, as esteemed as they are. Your main thesis seems to be severe production shortages for all HEV battery types except lead in the short term; forcing adaption of lead for the longer term. I'm sure it's occurred to you that this scenario could wreak havoc with lead battery producers who make large capital expenditures to expand capacity for the short term, only to have some other technology substituted.

What I foresee is similar to the "sticker shock" days of the 80's. People will hang onto their older cars longer, especially if they're already compacts with good gas mileage. With the economic slowdown, we're already seeing how elastic the demand for new cars is. This may significantly impact the near-term crunch for power train batteries you foresee, allowing non-lead substitutes to gain capacity.

"While automakers pay a lot of attention to weight and space, these savings are insignificant in the context of a 3,000-pound car."
Tell that to my silly compact spare tire.

Lastly, thanks Don for all the interesting and useful extra info in the links.

Li-ion Battery Technologies: Understanding Their Development Path

John-
Thanks for the running commentary. Here's some quotes from your comments where we disagree.

"For the next few years, micro and mild hybrids that don't do a whole lot more than provide start-stop fuel savings and a little power boost will likely be the rule. For those advances the industry will rely on advanced lead-acid products from existing suppliers. "

The industry is using non-lead batteries for these apps now. I realize you are relying on the F&S demand projections and regulatory mandates and foresee a supply squeeze. There's too many substitute technologies to make a clear call that advanced lead will dominate in the short run.


"Building a better lead-acid battery for start-stop hybrid applications is an easy job. Redesigning the entire electrical system of every car on the road to accommodate new and largely untested battery systems is not. The continuity race clearly goes to lead-acid."

Any hybrid is a major design and engineering challenge for auto manufacturers, which is why they aren't bothering with anything but full hybrids. Once you've designed a hybrid drive train, any batteries will drop in. Electrons are electrons.


"OEM auto manufacturers will voluntarily cut their production or the EU and the US are going to abandon their C02 emission rules and CAFE standards, there is only one possible market result. "

I believe the short term market result will be advanced ICE and smaller engines. Non-lead hybrids will fill a niche in smaller quantities commensurate with battery supply and higher cost.

We will have to wait & see how this plays out.
I wouldn't bet on this photo finish.

Li-ion Battery Technologies: Understanding Their Development Path

John-
Thanks for another energy intensive article with lots of good info, comments and links.
One has to wonder about a govt report that never got published. They obviously spent some time on it & it probably eventually will see the light of day as Don mentions.
On the other hand, I read it twice and a lot of it seems either obvious, or like socialism, or like a few kids who want to start their own Manhattan Project. Reagon & my father both warned about when the govt shows up and says they want to help.

Bottom line is there's a lot of work to be done to get economically feasible batteries for car power, at any level or scale.

Based on the spectrum of battery technologies and applications, I agree with you that there's a niche for everyone and the niche is constantly changing as the situation evolves.

For applications like Infocast's Storage Week, you can't beat VRLA. I've been in a lot of server farms, telecom installations and nukes and they all have large (car and bus sized) VRLA batteries. These stationary applications include storage for alternative energy generation. I don't know who makes them, but I think the growth potential, economics and timing are there.

When it comes to transportation like hybrid trains and storage energy for boats / ships, I think the economics are still in favor of lead. It would be interesting to know why GE is looking for something different for their locomotives. Plus there are specialized applications like yachts where the charge rate has the biggest impact (tnx ART) because generation cost is so high.

For cars & trucks, energy density is the major factor. Less so in todays hybrids, but primary for anything with a plug. If you look at the ThunderSky webpage milestones, they're building a lithium factory a year. And they have plenty of competition in their own backyard. The idea that once China's internal demand catches up they will ignore our market is absurd. Especially in the unlikely event that we're a captive audience and they're sole source. I really don't buy the national security argument either, unless the Taliban gets into the biz. China has nuclear weapons, what are we going to do? So I really don't think lead has a future in cars, short or long term.

Anyway, considering investment scenarios for pure play advanced technology battery companies at this point is like playing Russian roulette if you're basing demand on the car market. There's too many variables and unknowns. The established and growing demand for lead batteries may not be glamorous, but at least it's less risky.

Li-ion Battery Technologies: Understanding Their Development Path

"sent me an unpublished "pre-decisional draft" of a DOE report titled National Battery Collaborative (NBC) Roadmap, December 9, 2009"

I presume it won't be published for 6 mos & 2 days

Why Advanced Lead-Acid Batteries Will Dominate HEV Markets

So the EU mandate is 25% in 5 years.
No problem, I don't see anything current vehicle technology can't solve. Put a small(er) forced induction gas or diesel ICE on a CV transmission to keep it in its MPG sweet spot. Combine with better aerodynamics and reduced rolling resistance tires, plus the stopped engine turn-off from a Prius or Insight. The only thing lost from a full hybrid is regenerative braking, which only amounts to 1.3 KWh from 60mph and 300 Wh from 30mph.
I won't feel like a regular car, but that's what happens with EU or CAFE mandates. Actually, it will feel more like a full hybrid.

John- If passenger/vehicle weight ratios make such a difference in EV's, why are the top applications today in delivery vehicles? Like Don's LifeBatt lithiums.

Why Advanced Lead-Acid Batteries Will Dominate HEV Markets

John-
I think your thesis was summed up well in the following:
" there are no facilities that can make batteries for millions of cars to help satisfy the EU mandate, and (c) once the auto industry engineers lead acid solutions for Europe, they are not likely to throw all their hard work out the window so that they can implement a more expensive technology in the US. "
"the factories that make those NiMH batteries are running at full tilt."
Combined with Jack L. comment:
"THE SHORTAGE IS OF (lithium) PRODUCTION CAPACITY"

The presumption is the EU mandate can only be solved with electric hybrids, as opposed to other ICE technologies or even smaller ICE engines. As you probably know, the Europeans are very adverse to lead, initiating the leadless solder movement for electronics some years ago. I will be surprised if they start importing lead batteries in vast quantities.

This sounds more like a crisis of the timing of production, rather than technology. Without knowing the details on the severity of the mandate, or the time frame, I suspect the short term fix will be more and advanced ICE technologies.

I don't think you realize how easily substitutable battery technologies are for each other, especially going smaller and lighter, once the drivetrain is engineered. Electrons are electrons.

I predict the Chevy Volt will flop because of its $50K+ purchase price and guaranteed poor MPG performance as a highway cruiser. It will not be for naught because the next step will be to pull the ICE-generator to reduce cost.